Does Transformational Leadership Style Affect the Relationship between Strategy Communication Process and Firm Performance? A Look at State Corporations in Kenya

Strategy communication and transformational leadership are closely connected, as both are essential for driving organizational change and ensuring the successful implementation of a strategy and, hence, organizational performance. The strategy communication process is a critical component in strategy implementation, ensuring that the strategic objectives, initiatives, and goals are effectively communicated throughout the organization. This process helps align employees, stakeholders, and teams with the organization's strategic vision and ensures that everyone understands their role in achieving the strategy. Strategy communication is crucial because the best strategy will not give the intended results if it is not effectively communicated to all stakeholders. Transformational leadership focuses on inspiring and motivating employees to embrace new directions, while effective strategy communication is the tool through which leaders convey that vision, foster alignment, and drive engagement. This is critical in both private and Public organizations. Public organizations in developing countries like Kenya are in even greater need of this due to their central place in the delivery of public goods and resources allocated to them. There have been calls for reforming the state agencies, which stems from various challenges that they face. These include corruption, poor service delivery, inefficiency, and lack of effective oversight. The demand for leadership reforms is often a response to the need for public trust in government institutions and for strengthening the country's public sector management. Against this backdrop, the study sought to establish the moderating role of transformational leadership in the relationship between strategy communication and the organizational performance of state corporations in Kenya. The study adopted a descriptive research design. The target population was 221 state corporations, of which 143 were the sample size. Respondents were Chief Executive Officers and Senior Managers, responsible for strategy and planning. A self-administered questionnaire was used to collect the primary data, and Statistical Package for Social Sciences (SPSS) version 25 was used for data analysis. Pearson correlation results showed a significant relationship between strategy communication and firm performance (0.316, p<0.05). Regression analysis results revealed that the strategy communication process positively influences firm performance (β=0.075, p<0.05). Results indicate that the introduction of transformational leadership led to F change from (F=15.234, p<.000) to (F=7.111, p<.009), indicating that transformational leadership affects the strength of this relationship. However, despite the reductions, the relationships remain statistically significant (p < .05). Based on the study, transformational leadership moderates the relationship between strategy communication processes and firm performance. The study recommends the development of transformational leadership through the creation of a platform for seamless organizational communication to spur the performance of state corporations. Leadership performance and reward systems should be designed to promote transformational leadership as it has many benefits across the organization.